Entain PLC (LSE:ENT), the owner of Ladbrokes, Sportsbet and Gala Bingo, is expected to report revenue growth in its third-quarter trading statement on Thursday 13 October, but this will not tell the whole story and management are expected to be cautious about the outlook.
The bookmaker and online casino, poker and bingo platform performed well during the pandemic as customers reverted to online, but the trend started to reverse in the first half of the year.
Online revenues remain above pre-pandemic levels and the larger customer base looks to be more engaged, boss Jette Nygaard-Andersen revealed.
But in July the FTSE 100-listed group in July cut its online growth guidance as the cost of living crisis affects the amount customers want to bet.
It said it expects online revenue growth to be “flat” for the full year, down from the previous “mid to high single digit” growth it had guided to before, after online sales fell by 7% across sports and gaming in the first half of the year and with the “uncertain” macroeconomic outlook.
However, the US joint venture, BetMGM, with casino group MGM continues to be a major part of the attraction for investors, with a 23% market share of the still-nascent market as net gaming revenue grew 65% in the first half and expected to generate over US$1.3bn for the year, but remain lossmaking.
Alongside its half-year results in August, Entain unveiled the acquisition of SuperSport, taking its tally to five takeovers in 2022 already, offering the potential for expansion into the fragmented central and eastern European markets.
On the outlook, with underlying earnings (EBITDA) up 17% in the first half, Nygaard-Anderson said "momentum remains strong" and EBITDA was expected to be in the range of £925-975mln, in line with the City analyst consensus at the time.
Broker Peel Hunt said: "Management is likely to be more cautious on the outlook next week than in August, but we expect Entain’s strong online offer to benefit from diminished out-of-home spending and to provide resilience."
It has also been subject of anti-money laundering practices of late, with UK authorities having recently issued a £17mln fine and the Australian financial crimes regulator examining whether the local subsidiary has broken anti-money laundering and counter-terrorism laws.